Photographer: Ariana Lindquist/Bloomberg

After 19 Die, Intercept CEO Insists Drugmaker Is Still on Track

  • Shares have fallen by almost half amid concerns about pill
  • ‘It’s a new drug. It just takes time,’ CEO says in interview

Nineteen patients taking Intercept Pharmaceuticals Inc.’s lone drug have died. The stock has dropped by almost half in two weeks as questions arise about the pill’s future use. Amid all that, Chief Executive Officer Mark Pruzanski remains sanguine.

Pruzanski says a trial to expand the treatment’s use into a wider population and make it a blockbuster will continue as planned. As for the deaths, he maintains that doctors prescribed the wrong doses to the wrong patients.

“It’s a new drug. It just takes time for some physicians to truly understand how to appropriately prescribe a drug,” Pruzanski said in a telephone interview with Bloomberg. Ten of the patients who died “were so sick and likely to die in any case,” he added.

Pruzanski, 49, leads the New York-based company from the west side of Manhattan. He co-founded Intercept in 2002 after leaving Apple Tree Partners, a venture capital firm he helped start in 1999.

Three years ago, Intercept was one of biotech’s highest flying names -- with its shares briefly topping $450 and a $6 billion market valuation. That optimism was built around the pill that’s now giving it so much trouble, Ocaliva, the company’s lone on-the-market product.

For now, Ocaliva is only approved for a rare liver disease founds in tens of thousands of patients. Intercept is studying it in another condition, called NASH, that affects millions more -- a lucrative finish line that it now seems like the company is limping toward.

Competitors aren’t far behind. Gilead Sciences Inc. and Allergan Plc have their own experimental drugs for NASH. Both Allergan and Intercept say they’ll have final-stage data on their drugs in the first half of 2019. Gilead will get crucial results back that year, as well.

Pruzanski remains confident. “We are in the lead,” he said.

That hasn’t comforted investors much. Intercept’s shares are down 48 percent, as of Tuesday’s close, since the company announced on Sept. 12 that it had identified 10 deaths of patients on the drug. The FDA followed up with a warning last Thursday, noting nine more deaths. The drugmaker’s market value is down to $1.5 billion, is a fraction of its March 2014 peak.

The NASH Question

“Intercept is in turmoil,” Asthika Goonewardene, an analyst for Bloomberg Intelligence, wrote on Monday. “These issues raise questions about what happens in a broader patient population such as NASH.”

NASH, which stands for nonalcoholic steatohepatitis, is where the money is. The disease, which is linked to obesity, affects an estimated 3 percent to 12 percent of all Americans -- a huge market that analysts have predicted could boost Ocaliva’s annual sales to over $1 billion by 2022.

For now, the drug is only approved in patients with a disorder called primary biliary cholangitis, or PBC. Some patients with PBC have badly damaged livers, potentially exacerbating side effects of the drug -- as may have happened in the patients with advanced forms of the disease who died. The question for Intercept is whether the problems in those more dire patients will carry over into the wider group.

Numerous questions remain unanswered about the deaths, including whether the company or the FDA could have done more to educate doctors and prevent the risks.

During a meeting convened by the Food and Drug Administration to discuss the treatment in April 2016, doctors said that there were insufficient data on patients with advanced forms of the disease. In one trial presented at the meeting, nine out of 41 PBC patients on the highest dose had liver-related side effects.

“There does seem to be a dose-related increase” in liver problems, Jean-Pierre Raufman, a gastroenterologist at the University of Maryland School of Medicine, said at the gathering of expert advisers. Still, at lower doses, “that seemed to be an acceptable risk based on the likelihood of benefit.”

‘Gotten Burned’

The drug’s label tells doctors to lower the dose in advanced PBC patients to 5 milligrams once a week, because the drug accumulates at higher levels in the blood and liver. Seven of the people who died had advanced PBC and were instead taking the normal dose of 5 milligrams once a day, according to the FDA. But five patients with milder PBC also have had serious liver injuries, most of whom were using the correct dose, the agency said.

About 3,000 patients have taken the drug since it was approved in May 2016, according to Intercept.

Daniel S. Pratt, director of the Autoimmune and Cholestatic Liver Center at Massachusetts General Hospital in Boston, said Ocaliva shouldn’t be prescribed to very sick patients.

“They were using it on the wrong patients and have gotten burned,” Pratt said.

Pruzanski says the drugmaker acted properly. “We as a company -- from the first day we launched this drug -- we have done everything we can to properly educate physicians on the proper use,” he said.

In its warning from Sept. 21, the FDA said it couldn’t rule out liver damage from Ocaliva even when the drug is properly used. “Ocaliva may also be associated with liver injury in some patients with mild disease who are receiving the correct dose,” the agency said.

Three doctors interviewed for this story said the risks in PBC won’t necessarily show up in NASH, although a fourth said it was a worry.

‘Very Scared’

“People have this chronic liver problem and the last thing you want to do is give them medication that will make it worse,” said Sammy Saab, professor of medicine and surgery and head of outcomes research in hepatology at the David Geffen School of Medicine at the University of California Los Angeles. “People are very scared.”

Saab anticipates that Ocaliva will get approved for NASH, but that the FDA might restrict its usage. Patients in NASH studies are getting much higher doses of as much as 25 milligrams a day, and that could become a problem, he said.

Intercept’s CEO said NASH and PBC don’t necessarily overlap. “NASH is a completely different disease,” Pruzanski said.

In a mid-stage study published in 2014, NASH patients getting Ocaliva showed no liver-related side effects.

The deaths also put the spotlight on changes in the way medicines get approved. About half of drugs get the green light based on proof that they cure a disease or slow its progress, according to Aaron S. Kesselheim, an associate professor of medicine at Harvard Medical School in Boston. The rest are approved based on lab tests, called surrogate endpoints, that measure a biological marker, not the disease itself.

That was the case for Ocaliva, which was approved based on tests of a liver enzyme and bilirubin levels. The accelerated approval granted by the FDA meant that Intercept needed to continue testing the drug after its launch, to confirm it’s beneficial. That trial is underway.

“A lot of patients think that just because a drug is FDA approved, it’s effective and it’s safe,” Kesselheim said. “It doesn’t. It means there’s a lot still left to learn.”

— With assistance by Caroline Chen

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